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Assessing Russian Online Shopping Behavior 2016

By Melissa McDonald, Yandex

What a year of change for retail in Russia! For retailers considering the country’s potential, or assessing their own presence in the Russian market, the economic downturn and decreased consumer demand has shifted the retail landscape quite a bit. However, though the terrain looks rough, Russia’s online retail trade is experiencing continued growth – more and more consumers are turning to the Internet to make their purchases. With around 60% of the Russian population accessing the Internet, online shopping is just hitting its stride in Russia as the industry develops.

According to eMarketer, eCommerce sales are expected to grow by 19% over the next year, and online sales in Russia are expected to jump from $22.5 billion to $35 billion over the next three years. Similarly, Russia’s leading online shopping aggregator, Yandex.Market, saw a growth in sales from January to October 2015 with a total revenue of 72.5 billion rubles ($1 billion USD). That’s an increase of 23.6% compared to the same time period one year prior!

So what are some of the major aspects of Russian online shopping behavior that might help retailers assess their interest in playing in the Russian eCommerce market? Keep reading…

Cross-Border Sales

According to a 2015 study by PayPal and Ipsos, there were 9.1 million cross-border digital buyers in Russia in 2015, estimated to spend 4.52 billion. Russian online stores remain in high demand with more than 90% of domestic buyers making purchases directly from their webshops but online cross-border sales are expected to increase 14.4% in 2016. Most shoppers browse on both domestic and international eRetail sites. Russians turn to foreign retailers for selection and quality, but can be turned off by shipping concerns and payment options.

Yandex and research company GfK looked at online shopping trends in 2015, surveying Russian consumers from September to October 2015. According to the surveyed consumers, there has been a minor decrease in interest in foreign retailers (aside from Chinese sites). Interest in foreign stores decreased slightly in the past 12 months: 23% of buyers surveyed made purchases from international sites, while 26% had done so in 2014. However, in the past year, more than half of respondents placed orders with Chinese internet stores, an increase of more than 30% compared to 2014, and twice more than in 2013.

Russian Online Purchases

When it comes to what Russians purchase, they’re not that different from other online shoppers. From electronics to clothing, Russians are interested in a number of items, but have developed patterns for their product purchases from domestic and foreign retailers.

Domestically, small household appliances, clothes, and footwear are the most popularly shopped for categories. Russians shopping on foreign retailer sites prefer to purchase clothing, footwear, cosmetics, children’s goods, and mobile devices like phones and tablets.

Mobile devices are purchased more often in Chinese stores, whereas cosmetics tend to be purchased from stores in other countries. Since last year, there has been a decrease in the number of people buying clothing, auto parts, and small household appliances from European and American sites, while the number of customers in Chinese stores has grown in practically all product categories.

Major Online Shopping Periods

Compared to other markets, Russians follow similar patterns of seasonality when it comes to their eRetail purchases. It’s common for Russians to make their back-to-school purchases in August and purchase summer vacation items like bathing suits and sportswear toward the end of the spring. The most unique aspects of Russian online shopping behavior are the impacts of local holidays.

Foreign retailers must prepare their ad campaigns, promotions, and products for Russian New Year, Men’s Day, and International Women’s Day. These three holidays drive a significant portion of Russian online shopping and vary from Western celebrations.

Over the the past few years, Russia started participating in Black Friday weekend sales to kick off the winter holiday shopping season. For the most part, shoppers make their purchases throughout December for the ever-popular gift-giving day on January first. The majority of shoppers don’t start shopping in November and many last-minute shoppers are still making purchases in late December when Westerners have already made their returns. A third of Russian holiday shoppers turn to the Internet for gift ideas and to make these purchases, but omnichannel has a solid place in this process – 14% of shoppers search online but then purchase in stores

Russia recognizes men on February 23rd, which is Men’s Day otherwise known as “Day of Fatherland Defenders,” and celebrates International Women’s day on March 8th, During the weeks leading up to these holidays, Russians search for a number of gifts in the cosmetic and electronics categories to recognize their friends and family members. Combined, these three holidays make the winter a very important shopping period unique to Russia.

Beyond these holidays, Russians also search online for Valentine’s Day gifts, wedding gifts, and birthdays.

Platforms

Russians rely heavily on desktops to make their online purchases, but often use both desktops and mobile devices during the purchasing process. Russians are turning to tablets and smartphones more often for the selection and purchase of goods on eCommerce sites. Almost 30% of respondents from the Yandex GfK 2015 eCommerce survey have made a purchase via smartphone at least once, and almost half of them used special apps to do so. Smartphone purchases are especially popular in cities of Kazan and Samara. Often times the cost of connectivity and access to the Internet influence which devices Russians use to make their purchases. According to eMarketer research on select European countries mCommerce sales, Russian sales are expected to grow by 36% this year to $5.8 billion.

Payments

Cash-on-delivery is the most popular payment method for Russian online shoppers. Over 70% of Yandex GfK respondents used this payment option in 2015. From 2014 to 2015, card and e-payments increased by 7% to equal 69% of surveyed online shoppers. Russia’s top three e-payment systems are local players, Yandex.Money, WebMoney, and QiWi. Over half of surveyed shoppers paid for their order by credit card before receiving their product and 34% paid by card upon delivery. Given the variety in Russian payment options and the trust factor with payment at delivery, its important to offer customers localized options.

Going global always means going local. When a retailer is thinking about going to Russia, they need to consider the local habits, customs, holidays and technology that will make for a successful entry to the market.